O/657/18

Companies Act 2006 

In the matter of application No. 1454 by United Trade and Industry Limited for a change to the company name of Independent Parking Committee Limited, a company incorporated in England and Wales under number 10507363

Background and pleadings

1.  The company name INDEPENDENT PARKING COMMITTEE LIMITED (“the primary respondent”) has been registered since incorporation on 1 December 2016 under number 10507363.
 
2.  By an application filed on 1 June 2017, United Trade and Industry Limited (“the applicant”) applied under section 69(1) of the Companies Act 2006 (“the Act”) for the primary respondent’s name to be changed.

3.  The applicant states that the name “Independent Parking Committee Limited” is associated with it and that a company of this name was incorporated on 11 October 2012 until 30 March 2016.  On the latter date, the name of the company was changed to the applicant’s name.  The applicant claims that the name is in use by its customers, appearing on signs, letterheads and websites in connection with the provision of parking and transportation services.

4.  The applicant objects to the primary respondent’s name because it considers that it has been registered with no legitimate purpose other than to put the applicant’s goodwill to disrepute.

5.  The primary respondent filed a notice of defence, admitting that the applicant had initially registered the name, but denying that the applicant retains, or ever had, any goodwill in the name.  The primary respondent relies upon the following three defences:

“1) The company is operating under the name.  The Respondent is seeking to provide independent parking advice and consultancy services to businesses who have, unwittingly engaged the services of predatory parking companies who wish to extricate themselves from the long term and unfair contracts Parking Companies often rely upon.

2)  The name was adopted in good faith.  The Applicant had long-since abandoned the name, and this action by the Applicant is intended not to retain the use of the name, but to damage the respondent inappropriately.

3) The Interests of the Applicant are not adversely affected to any significant extent.  The applicant does not trade in this name, and it is a requirement of it’s [sic] current membership rules that any member companies change their signage to cease using the name Independent Parking Committee and update to the new trading name of International Parking Community.  The Applicant has no goodwill in the name, and indeed is considered a laughing stock by the British Parking Association and its members due to its entirely unreasonable conduct of its business.”

6.  Ms Carol Sole, the primary respondent’s only officer (director) was subsequently joined to the proceedings as co-respondent.  Ms Sole objected to this, but later withdrew her objection.

7.  Both sides filed evidence. The primary respondent made a written request to cross-examine Mr William Hurley, one of the applicant’s witness, which was allowed.  A hearing took place on 1 August 2018 at which the applicant was represented by Mr David Hughes of Counsel, instructed by Gladstones Solicitors, and the respondents by Mr John Wilkie, Head of Legal at Private Parking Appeals Ltd.  Mr Hurley was also present at the hearing, and was cross-examined.

The applicant’s evidence 

8.  Mr Hurley’s witness statement is dated 25 September 2017.  He explains that he was appointed as company secretary of the applicant at incorporation and later, on 26 June 2013, he was appointed as a joint director.  He states that the name Independent Parking Committee was chosen to reflect the applicant’s intention to be an organisation which provided a fair balance between the rights of the motorist and those involved in the management and enforcement of parking on private and unregulated land.  

9.  Mr Hurley states that the applicant was awarded Accredited Trade Association (“ATA”) status by the Government in 2014, at which time it was called Independent Parking Committee Ltd.  All private parking operators had to be a member of an ATA in order to obtain the details of the registered keeper of a vehicle from the DVLA, in order to issue a parking ticket.  There was only one other such organisation, the British Parking Association (“BPA”).   A Code of Practice, which is a ‘second edition’, is exhibited at WKH-3, showing a logo which includes the words Independent Parking Committee.  The document is undated.  Under cross-examination, it was put to Mr Hurley that this edition of the Code dated from 2014, but Mr Hurley was unable to confirm if this was so.  At the time of his statement, Mr Hurley stated that the applicant had over 100 members.

10.  Exhibit WKH-4 is a copy of a news story published on the gov.uk website on 8 July 2014, reporting the applicant’s accreditation as an ATA (under the name Independent Parking Committee).  Mr Hurley states that the applicant, when it was called Independent Parking Committee Ltd, was the only ATA to provide an appeals service which is approved by the Government under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015.

11.  Mr Hurley explains that the applicant’s expanding nature and diversification of activities led to a decision by the directors to change the registered name to the applicant’s current name, United Trade and Industry Ltd, referred to by Hurley as “UNITI”.  During cross-examination, Mr Hurley further explained that the company was considering other areas, such as dog-fouling, and environmental issues.  The name was changed on 31 March 2016.  He states:

“Pursuant to section 81 of the Companies Act 2006, all the assets/right (including the goodwill and the reputation of the Independent Parking Committee Ltd) and its liabilities were retained by UNITI.”

12. Mr Hurley states that the applicant owned the domain name independentparkingcommittee.co.uk and that the applicant’s trading style was expanded to include International Parking Community.  He states that, following the re-naming, the applicant contacted all of its operators/members informing them of the name change but that the applicant was retaining its trading style of Independent Parking Committee and that they were to retain its name and logo on their signage and websites.  However, it seems that this was optional, rather than a requirement, because Mr Hurley goes on to say that the members were contacted on 31 March 2016 in the following manner:

“The good news is that you will not have to change any of your existing signs or any immediate changes to your stationary [sic].  The Independent Parking Committee will remain a trading style of Uniti and where you have used any logo on your signs or elsewhere you won’t be required to remove them as we have retained intellectual property of the old names and logos.”

13.  Mr Hurley states that the name Independent Parking Committee still features on many of the members’ customer signs.  He exhibits, at WKH-5, what he describes as copies of signage displayed by the applicant’s members prior to and after the application to change the primary respondent’s name was made.  The exhibit consists of five pages.  The first and second, which are undated, do not appear to be actual signs.  We have reproduced page 2 (page 1 is identical, with minor variations) and the three photographs which comprise the remainder of the exhibit:

14.    Mr Hurley points out the logo at the bottom right hand side of each notice, which he states appears with the words Independent Parking Committee.  He states that the same logo and wording are also still displayed on members’ letterheads and on a number of websites.  He includes the URL address for a Government website, but does not provide a print of what would be seen at that address.  It is the responsibility of parties to provide evidence, not the Tribunal’s responsibility to investigate website links which may, or may not, represent the content as it was at the date of the witness’ statement.  Mr Hurley exhibits at WKH-6 a copy of an article dated 21 April 2017 from the RAC’s website, entitled “Nearly five million vehicle records shared with private parking firms in 2016/17”.  There is a mention of the name Independent Parking Committee as being one of only two ATAs.

15.  Mr Hurley claims that Ms Sole incorporated five companies, including the primary respondent, as “self-styled ‘specialists’” in challenging parking tickets.  He believes that the registration of the primary respondent, which has the same name as that which the applicant still uses and is also the main part of the applicant’s domain name, was opportunistic.  The applicant wrote to Carol Sole on 16 December 2016 (Exhibit WKH-9) to inform her that the applicant owned the goodwill and had a reputation in the name Independent Parking Committee, stating that it would commence action before this Tribunal unless the name was changed.  Ms Sole replied on 23 December 2016 (Exhibit WKH-10) denying that the applicant had goodwill in the name, requiring proof of the same and refusing to change the name.  The applicant responded on 5 January 2017 (Exhibit WKH-11).  It is unnecessary to give any more detail about the content of these letters.

16.  Mr Hurley exhibits a copy of a letter (Exhibit WKH-17), dated 17 August 2017, from the primary respondent to an entity, the details of which have been redacted.  In the letter, entitled “Passing Off – Letter Before Action” the primary respondent says that it has been brought to its attention that the entity has, inter alia, signage referring to Independent Parking Committee and that it is passing off as the primary respondent is registered and therefore “hold[s] goodwill in the name”.  Mr Hurley submits that this letter shows that the primary respondent accepts that the applicant has retained goodwill in the name Independent Parking Committee.

17.  John Davies is a former director of the applicant.  His witness statement is dated 27 September 2017.  He repeats statements made by Mr Hurley.  Mr Davies exhibits a letter sent to him by Ms Sole, dated 17 August 2017 (Exhibit JLGD-1).  In the letter, Ms Sole alleged that the applicant’s renewal of its domain name on 29 April 2017 which it had owned since 2013 and which included the words ‘independent parking committee’ was likely to be abusive and constituted passing off.  Ms Sole requested the transfer of the domain name to the primary respondent to prevent legal proceedings being commenced.

18.  David Blake is an employee of Parking and Property Management Limited.  His witness statement is dated 5 October 2017.  He states that he is authorised by his company to make the statement.  Mr Blake states that his company is a member of the IPC (Independent Parking Committee).  Mr Blake confirms that the signs exhibited by Mr Hurley at WKH-5 are signs displayed by his company at their sites.  He states:

“I am aware that the IPC expanded on its trading style in 2016 and formally changed its name at Companies House to the United Trade and Industry Limited and expanded on the anachronism[] IPC so that it also stood for the International Parking Commission as well as the Independent Parking Committee.  The signage that was already displayed on member’s [sic] sites however was to remain unaltered and the IPC logo was to remain that of the Independent Parking Committee whose trading style and brand were to remain unaltered.”

19.  Mr Wilkie cross-examined Mr Hurley on his evidence.  We found Mr Hurley to answer the questions clearly and in a straightforward manner.  Most of the questioning did not shed any useful light upon Mr Hurley’s evidence.  However, we take note of the following:

Q.	Your own company abandoned the registered name of Independent Parking Committee Ltd on 30 March 2016?

A.	We the changed name of Independent Parking Committee Ltd to United Trade and Industry Ltd and at the same time we amended the trading styles that we used. 

Q.	And why did you change the name, Mr Hurley? 

A.	We changed the name because when we created the name Independent Parking Committee, that was with an idea of creating ‑‑‑ it was before we had such heavy involvement of government and it was with the intention of creating an independent committee to do with parking, and we hoped that the Government would sit on it ‑ the DVLA, the Department for Transport and as it happens now the Ministry of Housing and Local Government.  It very quickly became clear that if it is anything to do with parking, it is such an emotive thing that nobody in government wants anything to do with it unless they absolutely have to, and so the name Independent Parking Committee didn't work perfectly for what we were doing at the point a few years down the line, having been trading for a few years.  However, we had ‑‑‑ and so we changed the name because we had now started to do stuff with Parking Australia in Australia so we had become international.  We also at the same time were having conversations with government about other areas not to do with parking; to do with dog fouling and environmental issues.  We were having conversations with them, not serious in‑depth conversations, I am not suggesting we were, but the idea of the business was to start to have different limbs so it wouldn't just be limited to parking.  That was why it was United Trade and Industry.  We felt that that gave us the ability to do anything, to diversify and create additional codes of practice for other areas, one was an appeal retail association, but what we wanted to do was make sure that we had trade styles that worked.  During the course of getting accreditation by the Government as an accredited trade association, one of the things we did was audit our parking operator signs.  They are not required to have our logo on their signs, but in any carpark that they have 99 per cent of the operators put our logo on the signs and it said "Independent Parking Committee" at the time, so whilst we changed the name to allow us to do different things and kept the trading style of IPC and created a new trading style of International Parking Community to reflect what we were doing in Australia, we also had thoughts that we needed to keep the trading style of Independent Parking Committee because our operators, and it's impossible to tell you the number but I would imagine it is over 10,000 signs that we were distributed throughout the UK that had our logo on there, so the first question that we were asked by our operators was, "Do I need to change my signs?  Do I need to do anything?"  Of course as a trade association representing them we didn't want to cause our members any difficulties, so we made it clear to them that they would not have to change anything, that we would be keeping the trading style of the Independent Parking Committee.  There is also an idea in the future which we still want to revive in the Independent Parking Committee if the opportunity arises to get a panel of independent people to sit there, so that is why we changed it and why we kept the trading style of Independent Parking Committee.

…

MR WILKIE:  Do you still feel that there is sufficient goodwill in a name that you abandoned some two years ago that you are entitled to have the Tribunal find in your favour. 

A.	We didn't abandon the name in any way, shape or form.

Respondents’ evidence 

20.  Ms Sole’s 17-page witness statement is dated 16 November 2018.  Ms Sole identifies herself as the sole director of the primary respondent.  She states that the beneficial and only shareholder of the primary respondent is a company called Private Parking Appeals Ltd (“PPA”).  Ms Sole is a director and majority shareholder of PPA which she states offers motorists an appeal service for challenging parking tickets issued on private land.  She explains that PPA has expanded and has a number of trading styles: Appeal Parking Tickets, Appeal My Ticket, London Credit Services, Parking Ticket Appeals and Parking Ticket Appeals Service.

21.  Ms Sole states that during 2016, PPA began to receive queries from landowners for assistance with their parking arrangements and a decision was taken to incorporate the primary respondent, which took place on 1 December 2016.  She states:

“…the name was adopted in good faith as being free and available after carrying out some due diligence to ensure that the name was not used by an identifiable trading entity.”

22.  Ms Sole states that the “planned purpose” of the primary respondent is to offer a consultancy service regarding parking companies in situ on private land.  Ms Sole states that the intention was to fully launch the new service during the first half of 2017.  Ms Sole states that a logo was created (Exhibit CSS03 is a blank letterheaded page with a circular logo including the words Independent Parking Committee); and that a meeting was arranged at the bank with the intention of opening a new bank account, and new business plans drawn up.  There are no dates or details about these.

23.  Ms Sole exhibits at CSS04 copies of letters before action from the applicant, dated 16 December 2016.  Ms Sole explains that, upon ascertaining that the applicant “did not own any trade mark rights to the “Independent Parking Committee””, that she/the primary respondent took no further action.  She says, of the applicant’s change of name on 31 March 2016:

“By changing name under their own volition, the new name became operational and the former name was then available for general [sic].”

24.  Ms Sole states that the applicant trades using the name International Parking Community.  She exhibits the following from the “Wayback Machine” internet archive, showing that the applicant’s website, as of 23 March 2013 (a week prior to the name change), said “IPC Independent Parking Committee”, but that on 3 April 2016 (just after the name change), it said “IPC Independent Parking Community”:

25.  Ms Sole exhibits other documents which she states were taken from the applicant’s website, showing the words International Parking Community.  However, she does not state when these were taken and they are not dated; the assumption must be that they are contemporaneous with the date of her witness statement, which does not assist with the picture as of the date of incorporation of the primary respondent.  Ms Sole also exhibits a Wayback Machine screenshot, which she states was captured on 15 January 2018, showing no cached content for the domain name independentparkingcommittee.co.uk, owned by the applicant.

26.  The next section of Ms Sole’s evidence relates to her views about Mr Hurley and Mr Davies and about other proceedings.  We are not concerned with such matters.  What needs to be shown in evidence before us is whether the applicant had goodwill/reputation at the date on which the primary respondent was incorporated and, if so, whether the primary respondent can rely upon any of the defences.  The motivation for the applicant bringing the complaint is of no relevance, beyond the burden upon it to satisfy the provisions of section 69(1) (and section 69(5), if the latter is relevant).  However, the motivation of the primary respondent for its choice of name is relevant, because the burden is upon the primary respondent to make good its defence of having adopted the name in good faith.

27.   Ms Sole refers to the applicant’s Code of Practice, and states that the version exhibited by the applicant was current when the applicant was trading as Independent Parking Committee, a fact which is “not disputed”.  She states that newer versions of the Code were introduced in October 2016 and June 2017, referring to the International Parking Community, and exhibits relevant screenshots of the Code of Practice covers at Exhibit CSS012.  Ms Sole refers to Mr Hurley’s evidence under exhibit WKH-4 as “old documents” and states:

“…it has already been stated that it is common ground and not contended that the Applicant operated under the name “Independent Parking Committee Ltd” from launch until their change of name 2016.”

28.  Ms Sole states that the “old documents”, because they pre-date the applicant’s change of name, do not show that the applicant “is still trading under the name or has continued goodwill in the name.”  She disputes that the applicant’s members did not have to change their information to remove the applicant’s former name and states that many of the applicant’s members did change their information, substituting the words ‘International Parking Community’, exhibiting examples of members’ websites at Exhibit CSS014.  There are no dates as to when the members changed their websites; however, some of the examples bear a copyright date of 2018, which suggests the prints in the exhibit emanate from this year, after the relevant date.  Examples of members’ updated stationery are also undated.  

29.  Ms Sole exhibits (Exhibit CSS016) a copy of a witness statement made by David Blake (who has given evidence for the applicant) in proceedings involving a parking company and an individual, in Uxbridge County Court.  At paragraph 13, Mr Blake refers to the parking company being a member of the International Parking Community.  The witness statement is dated 3 October 2017 and refers to a parking violation charge dated 3 March 2017.  Both of these dates are after the relevant date.  

30.  Ms Sole exhibits an undated print from the Government website relating to requesting information about vehicles from DVLA.  The information refers to the International Parking Community.  This print is undated, but Ms Sole’s description of it implies that it is contemporaneous with her witness statement.  A print of an article from the RAC’s website is exhibited (Exhibit CSS018) which is dated 19 August 2016.  The article refers to the ‘International Parking Community’ as one of two trade bodies representing the private parking industry.

31.  Ms Sole submits:

“(h) The Respondent did not register the Company until some 9 months had elapsed since the Applicant change [sic] the name, this provided ample time for any confusion between the Respondents [sic] registration and the Applications [sic] new trading styles and name to have elapsed.  No evidence has been produced that the Applicant uses the extant name.”

And

(j) Neither the names or IPC logos are trademarked.  Moreover, the Respondent’s business is not likely to cause any confusion with the Applicants as it is totally different in nature.”

32.  Ms Sole states:

“i) The Respondent registered the company in good faith, the name was available and as stated due diligence ensured that no company was currently trading under that name.”

And

“k) The Respondent has expended time and money in not only challenging this appeal but to set up the Company itself, including designing logos and preparing materials/starting website content as well as formally registering the domain and expenses incurred in registering the business.”
Decision 

33.  Section 69 of the Act states:
 
“(1) A person (“the applicant”) may object to a company’s registered name on the ground— 

(a) that it is the same as a name associated with the applicant in which he has goodwill, or 

(b) that it is sufficiently similar to such a name that its use in the United Kingdom would be likely to mislead by suggesting a connection between the company and the applicant. 

(2) The objection must be made by application to a company names adjudicator (see section 70). 

(3) The company concerned shall be the primary respondent to the application. 

Any of its members or directors may be joined as respondents. 

(4) If the ground specified in subsection (1)(a) or (b) is established, it is for the respondents to show— 

(a) that the name was registered before the commencement of the activities on which the applicant relies to show goodwill; or 

(b) that the company— 

(i) is operating under the name, or 

(ii) is proposing to do so and has incurred substantial start-up costs in preparation, or 

(iii) was formerly operating under the name and is now dormant; or 

(c) that the name was registered in the ordinary course of a company formation business and the company is available for sale to the applicant on the standard terms of that business; or 

(d) that the name was adopted in good faith; or 

(e) that the interests of the applicant are not adversely affected to any significant extent. 

If none of those is shown, the objection shall be upheld. 

(5) If the facts mentioned in subsection (4)(a), (b) or (c) are established, the objection shall nevertheless be upheld if the applicant shows that the main purpose of the respondents (or any of them) in registering the name was to obtain money (or other consideration) from the applicant or prevent him from registering the name. 

(6) If the objection is not upheld under subsection (4) or (5), it shall be dismissed. 

(7) In this section “goodwill” includes reputation of any description.” 

Does the applicant have the requisite goodwill in the name relied upon?

34.  The primary respondent considers that the change of the applicant’s own name is pivotal.  There is no requirement under the Act that an applicant must have goodwill in its own company name. If the primary respondent defends the application, as here, the applicant must establish that it has goodwill or reputation in relation to a name that is the same, or sufficiently similar, to that of the contested company name so as to mislead by suggesting that there is a connection between the company and the applicant.  Such a name could be a registered trade mark or an unregistered trade mark/trading name.  The applicant does not purport to own any registered trade marks, nor does it have to.

35.  The relevant date for this purpose is the date of application to register the contested company name which, in this case, is the date of incorporation, 1 December 2016.  The applicant changed its name on 31 March 2016.  As we have noted, this, of itself, is not relevant.  What is relevant is that the applicant’s change of its own name coincided with the applicant’s decision to cease active use of Independent Parking Committee as a trading name, as of 31 March 2016.  The applicant has given evidence to this effect, and some of the respondents’ evidence supports the dating; in particular, the Internet Archive screenshots of the applicant’s website as of 23 March 2016 and 3 April 2016 (reproduced in paragraph 24 of this decision) showing the use of Independent Parking Committee and Independent Community, respectively.  

36.  Ms Sole has accepted that the applicant was trading using the name up until 31 March 2016 (see the quotation from her witness statement at paragraph 27 of this decision).  She has also submitted that the “old documents” in the applicant’s evidence do not show that “the applicant is still trading under the name or has continued goodwill in the name”.  It might be said that these statements, taken together, show that the respondents have accepted that the applicant had goodwill as of 31 March 2016.  We will firstly assess the evidence with a view to establishing to what degree it supports Ms Sole’s concession regarding the existence of goodwill as of 31 March 2016 when active use of the name ceased and, secondly, at the relevant date of 1 December 2016, eight months later, which is when the primary respondent was incorporated with the contested name.

37.  The concept of goodwill was explained in Inland Revenue Commissioners v Muller & Co’s Margerine Ltd [1901] AC 217 at 223:

“What is goodwill? It is a thing very easy to describe, very difficult to define.  It is the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start.”

38.  As of 31 March 2016, the applicant had used the name Independent Parking Committee for at least two years.  The applicant (under that name) had been awarded ATA status by the Government in 2014, a fact reported on the Government’s website on 8 July 2014.  Throughout this period, the applicant (under the name in question) was one of only two ATAs.  In order for private parking companies to be able to access the details of motorists from DVLA, they had to be members of one of the ATAs.  There were only two to choose from.  This is a clear case of a force which brought in custom.  Indeed, Mr Hurley states that the applicant had about 100 members.

39.  The applicant’s status as an ATA was mentioned in an article published on the RAC’s website on 21 April 2017.  The article was retrospective, looking back over the year 2016/17; nevertheless, it is notable that the name Independent Parking Committee was mentioned over a year after the name change, less than five months after the primary respondent was incorporated and only six weeks prior to the application being made to this Tribunal.  

40.  We have noted the photographs of the signs which Mr Hurley states still included the applicant’s old name after the name change had taken place.  We place little weight on the photographs by themselves because the logo is too small and indistinct to make out.  However, we do note that a certain amount of corroboration of Mr Hurley’s assertion has been given by the fact that the primary respondent wrote to one of the applicant’s members on 17 August 2017 advising that legal action would be taken if the member did not remove the name Independent Parking Committee from its signage.  This was well over a year after the applicant ceased active use of the name and over eight months after the primary respondent was incorporated with the contested name.

41.  Taking the evidence in the round, we concur with the position of both sides that at the date when active use of the name Independent Parking Committee ceased, 31 March 2016, the applicant had goodwill in the name.  This was eight months prior to the date of incorporation of the primary respondent, so we will now consider the position at that date, 1 December 2016.  In short, the question is whether, having ceased active use of the name, the applicant nevertheless retained goodwill in the name eight months later when the primary respondent was incorporated with the contested name.

42.  Mr Wilkie submitted at the hearing that if a name is not in use, there can be no goodwill in it; and, that there cannot be residual goodwill in a company that does not exist.  The latter submission conflates a company name registration with a name in which a person has goodwill or reputation, which we have dealt with earlier in this decision.  The first submission is also erroneous because the law recognises the concept of ‘residual goodwill’.  In Ad Lib Club Limited v Granville [1971] FSR 1 (HC), Vice Chancellor Pennycuick stated:

“It seems to me clear on principle and on authority that where a trader ceases to carry on his business he may nonetheless retain for at any rate some period of time the goodwill attached to that business. Indeed it is obvious. He may wish to reopen the business or he may wish to sell it. It further seems to me clear in principle and on authority that so long as he does retain the goodwill in connection with his business he must also be able to enforce his rights in respect of any name which is attached to that goodwill. It must be a question of fact and degree at what point in time a trader who has either temporarily or permanently closed down his business should be treated as no longer having any goodwill in that business or in any name attached to it which he is entitled to have protected by law.

In the present case, it is quite true that the plaintiff company has no longer carried on the business of a club, so far as I know, for five years. On the other hand, it is said that the plaintiff company on the evidence continues to be regarded as still possessing goodwill to which this name AD-LIB CLUB is attached. It does, indeed, appear firstly that the defendant must have chosen the name AD-LIB CLUB by reason of the reputation which the plaintiff company’s AD-LIB acquired. He has not filed any evidence giving any other reason for the selection of that name and the inference is overwhelming that he has only selected that name because it has a reputation. In the second place, it appears from the newspaper cuttings which have been exhibited that members of the public are likely to regard the new club as a continuation of the plaintiff company’s club. The two things are linked up. That is no doubt the reason why the defendant has selected this name”.

43.  In Starbucks (HK) Limited, PCCW Media Limited and UK Broadband Limited v British Sky Broadcasting Group PLC, British Sky Broadcasting Limited and Sky IP International Limited [2012] EWHC 3074 (Ch), Arnold J stated:

“138.  …if a business has not been abandoned in a manner which results in its goodwill being destroyed, a residual goodwill may continue to subsist for a time after the business has ceased trading: see Wadlow, The Law of Passing Off (4th ed) at §§3-220 to 3-226. In principle, the lesser the extent of the original goodwill and the more time that has elapsed since the business ceased trading, the more one would expect the residual goodwill to have evaporated; but the extent of any residual goodwill in any particular case is a matter for evidence.”

44.  We also take note of the following decision of Mr Daniel Alexander QC, sitting as the Appointed Person in an appeal from the Trade Marks Registry, Simmonds BL O/468/12: 

“50.  The Hearing Officer referred to the law on abandonment of goodwill as summarized in the headnote to Sutherland v. V2 Music Ltd [2002] EMLR 28. The registered proprietor accepted that this was correct.  In that case, Laddie J referred to Star Industrial Co.Ltd v.Yap Kwee Kor [1976] FSR 256, and said at [12] that if a party abandons a business and the goodwill associated with it, he cannot subsequently sue to protect that goodwill but he also observed that a passage of Star suggested that there might be a different result if there was no abandonment.  He emphasized the need to consider what was happening to the goodwill and said at [15] and [17]:  

Goodwill is an asset of a business. It can be very valuable.  It attracts customers.  It can facilitate finding more business.  It can be bought and sold.  It can be damaged.  It is because the action for passing off is intended to protect goodwill that it is not restricted to cases where the claimant can show that the defendant’s activities have deceived customers into purchasing his goods or services in substitution for the claimants’…. 
… 
 
As long as a claimant has not chosen to abandon his goodwill, it remains as an asset protectable from damage by passing off proceedings. 

51. More recently, in Maslyukov v Diageo Distilling Ltd & Anor [2010] EWHC 443 (Ch); [2010] RPC 21, Arnold J summarized the law in similar terms:  

…the test is whether the relevant business has been abandoned so as to destroy the goodwill. Mere cessation of business is not enough. Moreover, as Mary Wilson illustrates, cessation of production of goods or provision of services does not necessarily mean that there has been a cessation of business capable of sustaining goodwill, still less a destruction of the existing goodwill.    

52. In Minimax GmbH & Co Kg v Chubb Fire Ltd [2008] EWHC 1960 (Pat), Floyd J referred to Sutherland and drew attention to the difficulties in defining the minimum threshold of residual goodwill. He said at [15]: 

It is difficult to define any minimum threshold. It will all depend on the facts. How big was the reputation when use stopped? How lasting in the public eye are the goods or services to which the mark is applied? How, if at all, has the person asserting the existence of the goodwill acted in order to keep the reputation in the public eye? The greater each of these elements is, the longer, it seems to me, it will take for any goodwill to dissipate.   

53.  In Minimax, Floyd J reversed the decision of the hearing officer, holding that the evidence only established that the earlier mark had been in the public eye until the 1980s at the most and that there was only evidence of trivial use thereafter which was insufficient to found a passing off case at the relevant date in 2003. Minimax was almost certainly in the Hearing Officer’s mind in this case, since it was referred to it in both sides’ skeleton arguments before him.   

54. The Hearing Officer also referred to The Law of Passing-Off (3rd edn.) by Christopher Wadlow at paragraph 3-178. This says that if a business is deliberately abandoned in circumstances which are inconsistent with its ever being recommenced then the goodwill in it is destroyed unless contemporaneously assigned to a new owner. The passage continues:  

Otherwise, the goodwill in a discontinued business may continue to exist and be capable of being protected, provided the claimant intended and still intends that his former business should resume active trading. It is not necessary that the prospect should be imminent, but the mere possibility of resumption if circumstances should ever change in the claimant’s favour is not enough. The claimant’s intention to resume business may the more readily be believed where the original cessation was forced on him by external circumstances, but this factor is not conclusive either way. 

55. Kerly’s Law of Trade Marks and Trade Names, 15th edn, summarises the principles relating to extinction and abandonment of goodwill at paragraph 18-060 as follows (omitting footnotes):

If a business ceases or suspends trading temporarily, there remains a residual goodwill which the claimant might wish to sell or use in a reopened business.  If, once the business is definitively abandoned, however, so that the claimant no longer owns goodwill, there can be no passing off.  Where no positive decision is made to abandon goodwill but trade under the mark has nonetheless ceased with no concrete plans for restarting operations, the question of whether any goodwill survives, and for how long, is a question of fact in each case.      

56. That extract from Kerly’s neatly encapsulates the current law. It is marginally preferable to the formulation in Wadlow, because it is not necessary for goodwill to survive that the undertaking possessed of it have concrete plans for restarting operations.  That said, the longer the business is left un-resumed, the more likely that the goodwill will dwindle to such an extent that it cannot found an action for passing off.   

57.  It is common sense that the greater the reputation originally established, the greater are the chances that a sufficient residual goodwill still existed at the relevant date: see Knight v Beyond Properties Pty Ltd & Ors [2007] EWHC 1251 (Ch) (24 May 2007) at [28]. That shows that the issues of abandonment and establishment of goodwill cannot always be separated.  Equally, in my judgment, the extent to which the mark was kept in the public eye prior to the relevant date, for example, through the second hand market, servicing and parts, and a significant enthusiast following (as it was here), may in appropriate cases, be relevant to the overall evaluation of whether sufficient goodwill survived at that date.”    

45.  Although these are trade mark cases, they apply equally to the issues of goodwill in these proceedings.  In our judgment, the applicant retained residual goodwill at the relevant date.  This date was only eight months after the cessation of use of the name.  It is significant that the applicant, under its former name, was one of only two ATAs; membership of an ATA appears to be of paramount importance to parking companies.  It was the only one of the two ATAs to provide an appeals service accredited by the Government.  It is highly unlikely, given these facts, that the goodwill in the name would have completely dissipated only eight months later as claimed by the primary respondent.  Furthermore, the applicant did not require signage to be changed, and its evidence regarding the letter before action from the primary respondent reveals that the name was extant on signage after the date of incorporation.  The applicant informed its members that it was retaining the trading style and that signs could remain as they were, thereby keeping the name in the public eye.  The RAC still referred to it in April 2017.  Whether un-amended signs were compliant with trading standards requirements (the primary respondent submitted that they were not) or, whether the RAC reference was an oversight, are not relevant because even if this was so, it does not displace the fact that the applicant was presented as Independent Parking Committee by third parties after it had changed its company name. This lends support, and bolstered the perception, that its goodwill identified by the name extended beyond the date when the applicant changed its name.     

46.  Mr Hurley’s evidence under cross-examination was that the name had not been abandoned.  Additionally, Mr Hurley stated under oath that over 10,000 signs owned by the applicant’s members could stay as they were; this is hardly commensurate with abandonment of a name.  He stated that the applicant told its members that the applicant would be keeping Independent Parking Committee as a trading style and told us at the hearing that the applicant had ambitions to revive the name to get a panel of independent people to sit as a committee.

47.  We find that the applicant had the requisite goodwill in the name Independent Parking Committee as of 1 December 2016.

Are the names “sufficiently similar”?

48.  The respective company names must also be “sufficiently similar” that use of the primary respondent’s name would be likely to mislead by suggesting a connection between the parties. 

49.  The name relied upon is Independent Parking Committee.  The contested name is Independent Parking Committee Limited.  For the purposes of section 69(1)(a), a contested company name and the name associated with an applicant are the same if the only difference the designation of the nature of the company.  Consequently, the name upon which the applicant relies and the primary respondent’s name are the same.  

Defences

50.  As the ground specified in subsection 69(1)(a) is established, the onus switches to the primary respondent to establish whether it can rely on any of the defences pleaded in the counterstatements, which we deal with in turn.

Section 69(4)(a)(i): that the company is operating under the name.

51.  Mr Wilkie informed us at the hearing that the primary respondent had always been dormant, although it intended to operate.  Either a company was operating at the relevant date (which for this defence is the date of the complaint to the Tribunal), or it was not.  An intention to operate is not the same as stating in the counterstatement that the company is operating.  Nor can a dormant company ‘operate’, as submitted by Mr Wilkie.  If this was so, it would make the defence under section 69(4)(a)(iii), that a company had formerly operated and was now dormant, redundant because the wording of 69(4)(a)(iii) suggests that dormancy is the opposite of operating.  A further defence is potentially available under section 69(4)(a)(ii): that the company is proposing to operate and has incurred substantial start-up costs in preparation.  This was not pleaded.  We note that Ms Sole, in her evidence, referred to plans, a website and meetings at the bank, but did not file evidence showing any of these things or provide any dates.  Consequently, we cannot take that into account.

52.  The pleaded defence that the company is operating under the name fails.

Section 69(4)(d) that the name was adopted in good faith

53.  In (1) Adnan Shaaban Abou-Rahmah (2) Khalid Al-Fulaij & Sons General Trading & Contracting Co v (1) Al-Haji Abdul Kadir Abacha (2) Qumar Bello (3) Aboubakar Mohammed Maiga (4) City Express Bank of Lagos (5) Profile Chemical Limited [2006] EWCA Civ 1492, Rix LJ commented upon the concept of good faith: 

“48 The content of this requirement of good faith, or what Lord Goff in Lipkin Gorman had expressed by reference to it being "inequitable" for the defendant to be made to repay, was considered further in Niru Battery. There the defendant bank relied on change of position where its manager had authorised payment out in questionable circumstances, where he had good reason to believe that the inwards payment had been made under a mistake. The trial judge had (a) acquitted the manager of dishonesty in the Twinsectra or Barlow Clowes sense on a claim of knowing assistance in breach of trust, but (b) concluded that the defence of change of position had failed. On appeal the defendant bank said that, in the absence of dishonesty, its change of position defence should have succeeded. After a consideration of numerous authorities, this court disagreed and adopted the trial judge's broader test, cited above. Clarke LJ quoted with approval (at paras 164/5) the following passages in Moore-Bick J's judgment: 

"I do not think that it is desirable to attempt to define the limits of good faith; it is a broad concept, the definition of which, in so far as it is capable of definition at all, will have to be worked out through the cases. In my view it is capable of embracing a failure to act in a commercially acceptable way and sharp practice of a kind that falls short of outright dishonesty as well as dishonesty itself.”’

54.  In (1) Barlow Clowes International Ltd. (in liquidation) (2) Nigel James Hamilton and (3) Michael Anthony Jordon v (1) Eurotrust International Limited (2) Peter Stephen William Henwood and (3) Andrew George Sebastian the Privy Council considered the ambiguity in the Twinsectra Ltd v Yardley [2002] 2 AC 164 judgment. The former case clarified that there was a combined test for considering the behaviour of a party: what the party knew at the time of a transaction and how that party’s action would be viewed by applying normally acceptable standards of honest conduct. 

55.  The burden is on the primary respondent to make good this defence with evidence.  What needs to be shown is why the company name was adopted by the primary respondent.  The evidence does not support this defence.  Most of the evidence goes to the respondents’ views about the applicant and the letters before action.  Ms Sole gives evidence about the PPA having expanded, listing a number of trading styles, but Independent Parking Committee is not one of them.  She states that there were plans to start a consultancy service using the name and that the intention was to launch the service fully during the first half of 2017 but, as said above, no details of business plans and dates of meetings have been given; only an undated example of letterheaded paper.  The company did not start operating in the first half of 2017.  Ms Sole states that the primary respondent replied to the applicant’s letter before action (her letter of 23 December 2016, exhibit WKH-10 to Mr Hurley’s witness statement) and that, upon ascertaining that the applicant did not own any trade mark rights to the name, the applicant’s reply was filed but no action was taken.  She states that “by changing name under their own volition, the new name became operational and the former name was then available for general”.  The application to this Tribunal was not made until 1 June 2017.  It does not seem therefore that these proceedings affected matters up until 1 June 2017.  It would have been simple enough for the primary respondent to have produced evidence about its plans, bank account, meetings and website.  There is none.  The primary respondent’s evidence has focussed upon criticisms of the applicant’s evidence rather than supporting its three pleaded defences.

56.  The only direct reference to good faith is the following, from Mrs Sole:

“The Respondent registered the company in good faith, the name was available and as stated due diligence ensured that no company was currently operating under that name.”

57.  This is a reference to the fact that the primary respondent was incorporated with the contested name at a time when the name was available i.e. not registered on the Register of Companies, at Companies House.  She states that no company was currently trading under the name.  However, as we have seen, it is not a requirement that the applicant’s company name be the contested name, all that is required under section 69(1) of the Act is that the applicant has goodwill/reputation in the name upon which it relies.  We have already set out the law and our views about the applicant’s residual goodwill on 1 December 2016.  The primary respondent knew that the applicant had traded under the name up until eight months prior to incorporation.  We consider that, applying normally acceptable standards of honest conduct, that the good faith defence has not been made out.

58.  The good faith defence fails.

Section 69(4)(e) that the interests of the applicant are not adversely affected to any significant extent

59.  Mr Wilkie submitted that the areas of (intended) trade are different since the primary respondent is interested in appeals from parking fines, and the applicant in companies which charge for parking.  If the primary respondent commenced operating, the area of trade would be parking.  Making a distinction between appeals against parking fines and charging for parking and fines is too fine a distinction.  This is a common field of activity, with an identical name – a name which the applicant has stated it plans to use in the future.  We note that the loss of control of a trading name is liable, of itself, to cause damage to the associated goodwill: see Maslyukov v Diageo Distilling [2010] EWHC 443.   We are not satisfied that use of the primary respondent’s name could not adversely affect the applicant to any significant extent. Consequently, we find that the primary respondent cannot rely upon this as a defence.

60.  The defence that the interests of the applicant are not adversely affected to any significant extent fails.

Outcome

61.  The primary respondent has failed in its defences which means that the applicant succeeds in its application for an order that the name of the primary respondent be changed.  Therefore, in accordance with section 73(1) of the Act, we make the following order:

(a)	Independent Parking Committee Limited shall change its name within one month of the date of this order to one that is not an offending name; 

	(b)	Independent Parking Committee Limited and Carol Sole each shall:

(i)  take such steps as are within their power to make, or facilitate the making, of that change;

(ii)  not to cause or permit any steps to be taken calculated to result in another company being registered with a name that is an offending name.

62.  In accordance with s.73(3) of the Act, this order may be enforced in the same way as an order of the High Court or, in Scotland, the Court of Session.

63.  In any event, if no such change is made within one month of the date of this order, we will determine a new company name as per section 73(4) of the Act and will give notice of that change under section 73(5) of the Act.

64.  All respondents, including individual co-respondents, have a legal duty under Section 73(1)(b)(ii) of the Companies Act 2006 not to cause or permit any steps to be taken calculated to result in another company being registered with an offending name; this includes the current company.  Non-compliance may result in an action being brought for contempt of court and may result in a custodial sentence.  

Costs

65.  The Tribunal awards costs from the published scale of costs at paragraph 10 of the Tribunal’s Practice Direction.  This is intended to provide a contribution, but not recompense for the costs expended by the successful party.  For an award outside of the scale, there must a) be a request for such; b) a breakdown of expenses; and, most importantly c) reasons why the award should be outside of the scale.

66.  It is the applicant who has been successful in these proceedings.  Mr Hughes provided, with his skeleton argument, a schedule of the applicant’s costs, amounting to £8322.  However, he said at the hearing that he was not going to address us on costs off the scale and that he was aware that the Tribunal operates to the scale of costs rather than actual costs.  Mr Hughes told us that the schedule was to give some structure to his submissions about what work had been done by the applicant.  He also said:

“I do not believe we have included any expenses in the schedule of costs so I cannot in fairness invite you to make an award under that.”

67.  As set out in the Practice Direction, we understand ‘expenses’ to mean official fees incurred by the applicant, and Mr Hurley’s travel costs as the witness who was cross-examined.  In these circumstances, we do not propose to make any award for Mr Hurley’s attendance or to reimburse the official fees paid by the applicant.  We consider there to be nothing out of the ordinary in these proceedings and will make an award on the scale for preparing the form CNA1 and considering the CNA2, the evidence, and preparing for and attending a hearing.  The breakdown for these is as follows:

(i)  Preparing the CNA1 and considering the CNA2: The CNA1 was brief and the CNA2 contained a standard amount of information.  We award £300.

(ii)  The applicant’s evidence was light.  The respondent’s evidence was light on exhibits, but contained a lengthy witness statement which required consideration.  We award £700.

(iii) We award £1000 for preparation and attendance at the hearing.

68.  The total cost award to the applicant is £2000.

69.  Independent Parking Committee Limited and Carol Sole, being jointly and severally liable for the above costs, are ordered to pay United Trade and Industry Limited the sum of £2000.  This sum is to be paid within 14 days of the period allowed for appeal or, if there is an appeal, within 14 days of the conclusion of the appeal proceedings (subject to any order of the appellant tribunal).

70.  Under section 74(1) of the Act, an appeal can only be made in relation to the decision to uphold the application; there is no right of appeal in relation to costs.

71.  Any notice of appeal must be given within one month of the date of this decision.  Appeal is to the High Court in England Wales and Northern Ireland and to the Court of Session in Scotland.  The Tribunal must be advised if an appeal is lodged.

Dated this the 17th day of October 2018 

Judi Pike			Mark Bryant			Mark King
Company Names		Company Names		Company Names
Adjudicator			Adjudicator			Adjudicator